Benchmarks extend losses in noon deals

Indian equity benchmarks have extended their losses in noon deals as concerns in China continue to haunt. Moreover, market participants remained cautious ahead of Index of Industrial Production (IIP) for November and CPI Inflation data to be released later in the day. Investors are also eagerly waiting for quarterly earnings of IT major TCS to be released later today. Depreciation in Indian rupee too weighed down sentiments. The rupee surrendered its initial gains and was trading lower by 12 paise at 66.93 per dollar in noon deals on fresh bouts of demand for the American currency from importers and banks amid volatile domestic equities.

Most of the Asian equity indices are trading in red at this point of time. Though, some of them made smart recovery with Chinese stock market edging higher at the open and China’s yuan stabilising for the third-straight day. Back home, sentiments remained dampened on report that foreign investors sold shares worth Rs. 1,319.24 crore yesterday as per provisional data. Energy stocks are reeling under pressure after crude oil prices hit near 12 years low on oversupply glut. Meanwhile, the broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 1,103 shares on the gaining side against 1,381 shares on the losing side while 171 shares remain unchanged.

The BSE Sensex is currently trading at 24628.51, down by 196.53 points or 0.79% after trading in a range of 24616.59 and 24882.30. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.67%, while Small cap index down by 0.35%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.49%, Power up by 0.17%, Utilities up by 0.18%, Healthcare up by 0.13% and Consumer Durables up by 0.02%, while Bankex down by 1.66%, Realty down by 1.40%, TECK down by 1.39%, IT down by 1.29% and Metal down by 0.97% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.69%, Larsen & Toubro up by 1.21%, Sun Pharma up by 0.75%, Adani Ports &Special up by 0.73% and BHEL up by 0.57%. On the flip side, Axis Bank down by 3.77%, ONGC down by 2.54%, Bharti Airtel down by 2.01%, Tata Motors down by 1.98% and TCS down by 1.79% were the top losers.

Meanwhile, in order to fire up growth and tackle the growing unease in the farm economy, the government is making a strategy to focus on infrastructure, agriculture and restoring the health of the banking system areas as well as specific measures to ease stress in the rural economy as part of the 2016-17 Budget. There is a need to take effective measures to revive vital sectors and overall growth and the focus of the government is mainly on irrigation and agriculture as this is a very crucial Budget for the government.

Further, the infrastructure sector will see greater attention as the government is keen to step up investment despite a challenging fiscal situation. The government has already allocated Rs 5,300 crore to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana and has urged states to chip in substantially in this vital sector. In the absence of private investment, indications are that the sector will receive special attention, including unveiling of some innovative financing schemes. For banking sector, the government has taken several measures, including pumping in Rs 70,000 crore to recapitalise state-run banks. There is a view within the government that more needs to be done to secure the health of the crucial sector.

The rural economy, a key driver of demand and a support for the broader economy, has taken a knock from the two back-to-back seasons of patchy monsoon rains. The segment drives demand for everything from motorcycles to tractors, televisions and refrigerators. For agricultural sector, Finance minister Arun Jaitley already signaled the government's support by backing calls for raising investment in the crucial farm sector and leveraging technology to fire up growth.

Besides the focus on the crucial sectors Jaitley's Budget team is also working on the big numbers of the financial document, keeping in view the government's commitment to meet the fiscal deficit target of 3.9% of the gross domestic product for the current fiscal year.

The CNX Nifty is currently trading at 7503.00, down by 60.85 points or 0.80% after trading in a range of 7502.05 and 7588.30. There were 11 stocks advancing against 37 stocks declining on the index while 2 stocks remained unchanged.

The top gainers on Nifty were NTPC up by 1.91%, Larsen & Toubro up by 1.24%, BHEL up by 0.84%, Sun Pharma up by 0.70% and BPCL up by 0.58%. On the flip side, Axis Bank down by 3.67%, Cairn India down by 2.96%, Yes Bank down by 2.92%, Hindalco down by 2.89% and Ultratech Cement down by 2.41% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 tumbled 479 points or 2.71% to 17,218.96, Hang Seng decreased 142.78 points or 0.72% to 19,745.72, Taiwan Weighted slipped 19.97 points or 0.26% to 7,768.45 and KOSPI Index was down by 3.98 points or 0.21% to 1,890.86. On the flip side, FTSE Bursa Malaysia KLCI increased 5.86 points or 0.36% to 1,643.45, Shanghai Composite gained 7.48 points or 0.25% to 3,024.18 and Jakarta Composite was up by 51.04 points or 1.14% to 4,516.53.